Criminal breach of trust
Section 316 of the Bharatiya Nyaya Sanhita, 2023 deals with criminal breach of trust. Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be disc The Act came into force on 01 Jul 2024.
(1) Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits criminal breach of trust.
Explanation 1.—A person, being an employer of an establishment whether exempted under section 17 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952) or not who deducts the employee’s contribution from the wages payable to the employee for credit to a Provident Fund or Family Pension Fund established by any law for the time being in force, shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said Fund in violation of the said law, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.
Explanation 2.—A person, being an employer, who deducts the employees’ contribution from the wages payable to the employee for credit to the Employees’ State Insurance Fund held and administered by the Employees’ State Insurance Corporation established under the Employees’ State Insurance Act, 1948 (34 of 1948) shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said Fund in violation of the said Act, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.
Illustrations.
(a) A, being executor to the will of a deceased person, dishonestly disobeys the law which directs him to divide the effects according to the will, and appropriates them to his own use. A has committed criminal breach of trust.
(b) A is a warehouse-keeper Z going on a journey, entrusts his furniture to A, under a contract that it shall be returned on payment of a stipulated sum for warehouse room. A dishonestly sells the goods. A has committed criminal breach of trust.
(c) A, residing in Kolkata, is agent for Z, residing at Delhi. There is an express or implied contract between A and Z, that all sums remitted by Z to A shall be invested by A, according to Z’s direction. Z remits one lakh of rupees to A, with directions to A to invest the same in Company’s paper. A dishonestly disobeys the directions and employs the money in his own business. A has committed criminal breach of trust.
(d) But if A, in illustration (c), not dishonestly but in good faith, believing that it will be more for Z’s advantage to hold shares in the Bank of Bengal, disobeys Z’s directions, and buys shares in the Bank of Bengal, for Z, instead of buying Company’s paper, here, though Z should suffer loss, and should be entitled to bring a civil action against A, on account of that loss, yet A, not having acted dishonestly, has not committed criminal breach of trust.
(e) A, a revenue-officer, is entrusted with public money and is either directed by law, or bound by a contract, express or implied, with the Government, to pay into a certain treasury all the public money which he holds. A dishonestly appropriates the money. A has committed criminal breach of trust.
(f) A, a carrier, is entrusted by Z with property to be carried by land or by water. A dishonestly misappropriates the property. A has committed criminal breach of trust.
(2) Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to five years, or with fine, or with both.
(3) Whoever, being entrusted with property as a carrier, wharfinger or warehouse-keeper, commits criminal breach of trust in respect of such property, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.
(4) Whoever, being a clerk or servant or employed as a clerk or servant, and being in any manner entrusted in such capacity with property, or with any dominion over property, commits criminal breach of trust in respect of that property, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.
(5) Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent commits criminal breach of trust in respect of that property, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.
Section 316, The Bharatiya Nyaya Sanhita, 2023 (Act 45 of 2023).
Replaces a provision of the Indian Penal Code
IPC 405 Criminal breach of trust Text carried over almost unchanged 96%
Measured by comparing the text of the two provisions, not taken from an official correspondence table — there is no machine-readable one. See both texts side by side before relying on it.
Both regimes are live. The repealed enactment still governs what happened while it was in force. We never redirect one to the other.
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
How this offence is classified
From the First Schedule to the Bharatiya Nagarik Suraksha Sanhita, 2023, which classifies every offence under the Sanhita. Cognizable means a police officer may arrest without warrant; bailable means bail is a matter of right rather than of the court's discretion. This section is classified 4 ways.
| Offence | Punishment | Cognizable | Bailable | Triable by |
|---|---|---|---|---|
| Criminal breach of trust. | Imprisonment for 5 years, or fine, or both. | Cognizable. | Non-bailable. | Magistrate of the first class. |
| Criminal breach of trust by a carrier, wharfinger, etc. | Imprisonment for 7 years and fine. | Cognizable. | Non-bailable. | Magistrate of the first class. |
| Criminal breach of trust by a clerk or servant. | Imprisonment for 7 years and fine. | Cognizable. | Non-bailable. | Magistrate of the first class. |
| Criminal breach of trust by public servant or by banker, merchant or agent, etc. | Imprisonment for life, or imprisonment for 10 years and fine. | Cognizable. | Non-bailable. | Magistrate of the first class. |
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Delhi Race Club (1940) Ltd. v. State of Uttar Pradesh
Decided under Indian Penal Code 406, which this section replaces. The court did not have this Act before it.
Court's Decision & Legal Precedent
Judgement of Main Case order-3.pdf 2024-08-23 (not same-date order-4 ROP). Pardiwala/Manoj Misra, Crl A 3114/2024. Restates the distinction between criminal breach of trust (IPC 406: entrustment + dishonest misappropriation) and cheating (IPC 420: dishonest inducement at inception). The two do not ordinarily sit together on the same facts; FIR/summoning that conflates them is liable to be quashed. Map 406/420 and successors BNS 316/318.
On this section: Successor of IPC 406 (mapping.csv close). CBT/cheating divide carries to BNS 316.
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Nevada Properties Pvt. Ltd. through Its Director LTD vs The State of Maharashtra Home Department S. H. O
Decided under Indian Penal Code 405, which this section replaces. The court did not have this Act before it.
Court's Decision & Legal Precedent
The expression 'any property' appearing in Section 102(1) of the Code of Criminal Procedure, 1973 does not include immovable property. A police officer does not have the power to attach, seize, and seal an immovable property under Section 102 of the Code. The word 'seize' in Section 102 means actual taking of possession which cannot be done with immovable property without dispossessing the occupant, which power is not conferred by Section 102. Immovable property disputes must be adjudicated by Civil Courts or through specialized statutory procedures like the Criminal Law Amendment Ordinance 1944 or Chapter VIIA of the Code. However, police may seize documents or papers of title relating to immovable property as this is distinct from seizure of the immovable property itself.
On this section: Various offences under IPC cited in context of property-related crimes and the application of Section 102 to such investigations.
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Thermax Ltd. vs K. M. Johny
Decided under Indian Penal Code 405, which this section replaces. The court did not have this Act before it.
Court's Decision & Legal Precedent
A dispute arising purely from contractual obligations, even when it results in financial loss to the claimant, cannot be converted into a criminal offense under Sections 405, 406 or 420 IPC without establishing the essential ingredient of dishonest intention at the inception of the transaction. The appropriate remedy for breach of contract is a civil suit for damages, not criminal prosecution. When a complainant has previously filed identical complaints with police authorities which were investigated and closed as civil in nature, and thereafter files another complaint before a Magistrate suppressing such material facts and seeking criminal investigation, such action constitutes abuse of process of law. In the absence of specific statutory provision imposing vicarious liability on company directors and managers, they cannot be prosecuted under IPC sections for acts of the company. Section 34 IPC requires prior concert or meeting of minds with prearranged plan, which must be evident from the complaint itself.
On this section: Criminal breach of trust - requires that person be entrusted with property and dishonestly misappropriate it. Court held that mere non-payment of contractual obligation does not constitute breach of trust.
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N. Raghavender vs State of Andhra Pradesh Rep. by Cbi Cbi
Decided under Indian Penal Code 405, which this section replaces. The court did not have this Act before it.
Court's Decision & Legal Precedent
Suspicion, however strong, cannot substitute for conclusive proof in criminal convictions. The prosecution must prove its case beyond reasonable doubt by producing best evidence. The non-examination of a key witness who is the best person to clarify disputed facts is fatal to the prosecution case. Mere departmental misconduct, even if gross, does not constitute criminal breach of trust, cheating, or falsification of accounts unless the essential ingredients of these offences are proved beyond reasonable doubt. The absence of financial loss to the bank and the absence of any complaint from the affected party are material factors in determining criminal liability. Once entrustment of property is established, the burden shifts to the accused to prove that the property was dealt with in a legally and contractually acceptable manner, but this burden must be discharged in the context of the prosecution's failure to produce best evidence.
On this section: Defines criminal breach of trust; requires proof of dishonest misappropriation or conversion of entrusted property; establishes that mere retention without misappropriation does not constitute criminal breach of trust
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J. Ramesh Kamath vs Mohana Kurup
Decided under Indian Penal Code 408, which this section replaces. The court did not have this Act before it.
Court's Decision & Legal Precedent
Criminal charges involving misappropriation of organizational funds by office bearers in positions of fiduciary trust cannot be characterized as purely personal or civil disputes amenable to quashing under Section 482 of the Criminal Procedure Code based on settlement agreements, even when accepted by all parties including complaining members and current office bearers. The High Court must refuse to quash criminal proceedings in such cases because they involve crimes of breach of trust against the organization and society, and the timing of settlement after completion of investigation and charge-sheet filing demands that the trial court be allowed to determine guilt or innocence on evidence presented at trial. The distinction between Section 320 (compounding) and Section 482 (inherent jurisdiction) does not permit circumvention of the principles that serious offences involving breach of organizational trust and fiduciary duty are not amenable to settlement, regardless of whether all parties subsequently agree to compromise.
On this section: Criminal breach of trust by clerk or servant - relevant to charges against accused as office bearers having custodial responsibility for funds
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Internl. Adv. Res. Cen. for P. M. & N. M. vs Nimra Cerglass (p) Ltd.
Decided under Indian Penal Code 405, which this section replaces. The court did not have this Act before it.
Court's Decision & Legal Precedent
For an offence of cheating to be constituted under Section 420 IPC, the essential ingredients are: (i) making of a false representation; (ii) knowledge by the accused that representation is false; (iii) making the representation in order to deceive; and (iv) mens rea of dishonest inducement. Critically, the dishonest intention must exist at the time of making the inducement, not from subsequent failure to perform. A mere breach of contract, even if causing substantial financial loss, cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is demonstrated at the beginning of the transaction. When a technology transfer agreement explicitly provides for experimental development with contingency provisions for performance guarantee tests and liquidated damages, parties have contemplated possibility of failure to achieve specifications, negating the inference of dishonest intention at inception.
On this section: Criminal breach of trust - originally charged in complaint but investigating officer concluded no offence was made out
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Krishnamoorthy vs Sivakumar
Decided under Indian Penal Code 408, which this section replaces. The court did not have this Act before it.
Court's Decision & Legal Precedent
Non-disclosure of pending criminal cases involving heinous or serious offences, corruption, or moral turpitude by a candidate in the affidavit filed with nomination papers constitutes undue influence and corrupt practice under Section 123(2) of the Representation of People's Act, 1951, as it directly interferes with the free exercise of electoral right by depriving voters of their fundamental right to know the criminal antecedents of candidates, thereby preventing them from making informed and advised electoral choices. Once such non-disclosure is established in an election petition, the election must be declared null and void under Section 100(1)(b) of the RP Act without requiring proof that the result was materially affected.
On this section: Dishonest misappropriation by servant or agent, charges against appellant
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Dalip Kaur vs Jagnar Singh
Decided under Indian Penal Code 405, which this section replaces. The court did not have this Act before it.
Court's Decision & Legal Precedent
An offence of cheating is constituted only if the accused had fraudulent or dishonest intention at the time of making the promise; a pure and simple breach of contract does not constitute a criminal offence.
On this section: Definition of criminal breach of trust.
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State of Punjab vs Pritam Chand
Decided under Indian Penal Code 405, which this section replaces. The court did not have this Act before it.
Court's Decision & Legal Precedent
The mere existence of a contractual relationship and breach thereof, or the availability of civil remedies through arbitration, does not preclude criminal prosecution for breach of trust under Section 406 IPC. When facts allegedly constitute criminal breach of trust involving dishonest misappropriation of entrusted property, courts must apply the statutory ingredients of Section 406 and not summarily dismiss on the basis of contractual characterization. Where two reasonable views exist regarding the criminal or civil nature of allegations, appellate courts must remit for fresh substantive consideration rather than summary dismissal.
On this section: Definition of criminal breach of trust - establishes the essential ingredients: entrusting with property, dishonest misappropriation/conversion, or violation of direction of law or legal contract regarding discharge of trust.
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TARUNBHAI TALASHIBHAI JASOLIYA vs Government of Gujarat
Court's Decision & Legal Precedent
Non-payment of the price of purchased goods does not amount to criminal breach of trust under Section 316(5) of BNS as there is no entrustment of property in a sale transaction.
On this section: Court determined Section 316(5) is inapplicable as sale involves transfer of ownership, not entrustment.
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Kapil Jangid vs State Of Rajasthan
Decided under Indian Penal Code 405, which this section replaces. The court did not have this Act before it.
Court's Decision & Legal Precedent
A mere breach of contract in commercial transactions, even involving international trade and complex payment mechanisms like Bill of Lading adjustments, does not constitute the criminal offence of cheating under Section 420 IPC or criminal breach of trust under Section 406 IPC unless the prosecution proves that the accused had fraudulent or dishonest intention at the time of making the promise. Where parties have a long-standing business relationship, goods are delivered and paid for, and the disputed payment adjustment is communicated through email correspondence to which the complainant responds, the absence of fraudulent intention is evident. In such cases, the High Court should exercise its inherent powers under Section 482 CrPC to quash criminal proceedings that are essentially civil in nature and constitute an abuse of the process of court.
On this section: Definition of criminal breach of trust - requires entrustment of property and dishonest misappropriation in violation of law or legal contract
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Salil Shripad Mehendale vs The State of Maharashtra through Manpada Police Station
Court's Decision & Legal Precedent
An application for anticipatory bail may be disposed of as premature if the police have issued a Section 35(3) BNSS notice and undertaken to provide prior notice (e.g., 72 hours) before any actual arrest.
On this section: Substantive offences for which the applicant was booked.
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Gope Shamdas Rajwani vs The State of Maharashtrta
Court's Decision & Legal Precedent
In cases involving commercial/property disputes, the willingness to deposit a portion of the disputed value and the absence of criminal antecedents can weigh in favor of granting anticipatory bail under conditions of cooperation.
On this section: Criminal breach of trust (aggravated).
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Jaffar Ali Moosvi vs The State of Telangana
Court's Decision & Legal Precedent
When offences alleged against an accused are punishable with less than seven years imprisonment, the accused is entitled to be issued a notice under Section 35(3) of BNSS by the Investigating Officer instead of being arrested, and the High Court should direct the Investigating Officer to issue such notice rather than granting anticipatory bail, thereby protecting the accused's rights while ensuring cooperation with the investigation.
On this section: Offence alleged against the petitioner; nature and severity of the offence considered in determining bail eligibility
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Sai Krupa Rice Mill vs State of Telangana
Court's Decision & Legal Precedent
In criminal petitions seeking to quash FIR proceedings where the prescribed punishment for the alleged offences is less than seven years, the High Court should not quash the proceedings outright but should instead direct strict compliance with procedural safeguards under Section 35(3) of BNSS and the Arnesh Kumar guidelines by the Investigating Officer, while ensuring the accused cooperates with the investigation and the Investigating Officer considers the accused's defense before filing the final report.
On this section: Substantive criminal offences for which FIR was registered; Court noted that punishment prescribed for these offences is less than seven years
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Karmveer Singh vs State of Rajasthan
Decided under Indian Penal Code 408, which this section replaces. The court did not have this Act before it.
Court's Decision & Legal Precedent
In cases involving allegations of misappropriation of funds by an employee entrusted with collection duties, the High Court will not exercise its discretionary jurisdiction under Section 482 CrPC to quash the FIR merely on the ground that the accused has filed a counter-complaint regarding a separate incident of theft. The serious nature of the allegations of criminal breach of trust, cheating, and misappropriation warrants investigation, and the High Court will not interfere with the FIR unless there are compelling grounds to do so.
On this section: Criminal breach of trust by employee - applied to petitioner's status as field officer
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Questions about Section 316
What have the courts held on Section 316 of the Bharatiya Nyaya Sanhita?
Delhi Race Club (1940) Ltd. v. State of Uttar Pradesh (23 Aug 2024) is the leading judgment on this section among those set out below, though it was decided under IPC 406, which this section replaced -- the court never mentioned this Act: Successor of IPC 406 (mapping.csv close). CBT/cheating divide carries to BNS 316. Another 15 judgments on this section are set out below, 9 of them from the Supreme Court. They run from 2009 to 2026.
Is Section 316 of the Bharatiya Nyaya Sanhita bailable?
Non-bailable, under the First Schedule to the Bharatiya Nagarik Suraksha Sanhita, 2023.
Is Section 316 of the Bharatiya Nyaya Sanhita cognizable?
Cognizable. "Cognizable" means a police officer may arrest without warrant; "non-cognizable" that they may not. An offence under this section is triable by Magistrate of the first class.
How do I find court cases under Section 316 of the Bharatiya Nyaya Sanhita?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: BNS 316, section 316 BNS, section 316 of the Bharatiya Nyaya Sanhita. People searching for it also type bns 316 2 section in hindi and bns 316(5). Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 16 reported judgments on this section are set out on this page, beginning with Delhi Race Club (1940) Ltd. v. State of Uttar Pradesh (23 Aug 2024).
What should I read with Section 316 of the Bharatiya Nyaya Sanhita, and has it changed?
Its own text turns on section 17 (Act done by a person justified, or by mistake of fact believing himself justified, by law), so none of them can safely be read on its own. 2 other provisions in this corpus refer back to it. It carries forward IPC 405 (Criminal breach of trust), so the judgments decided under that provision are the case law on this one.
When did Section 316 of the Bharatiya Nyaya Sanhita come into force?
Section 316 of the Bharatiya Nyaya Sanhita, cited as BNS 316, came into force on 01 Jul 2024, having been enacted on 25 Dec 2023. It is in force as at the date shown on this page.
Other sections of this Act
- 2. Definitions2199 words
- 356. Defamation1543 words
- 335. Making a false document1318 words
- 101. Murder1177 words
- 303. Theft1104 words
- 3. General explanations858 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 14 Oct 2026. This page is not a substitute for legal advice.